Exhibit 10.2
HOKU SCIENTIFIC,
INC.
STOCK RESTRICTION
AGREEMENT
This Stock Restriction Agreement
(the “ Agreement ”) is made as of June 21, 2002
by and between Hoku Scientific, Inc., a Hawaii corporation (the
“ Company ”), and Dustin Shindo (“
Shareholder ”).
RECITALS
The Company is in the process of
negotiating a first round of financing with certain additional
investors (the “ New Investors ”), and in order
to induce the New Investors to enter into participate in the
financing, the Company and the Shareholder desire to enter into
this Agreement, pursuant to which the Shareholder agrees to subject
the shares of common stock of the Company held by the Shareholder
(the “Shares”) to vesting and to certain other
restrictions on the transfer of the Security Holdings.
1. Sale of Stock . On
the Purchase Date (as defined below) the Company has issued and
sold to Shareholder 7,200,000 shares of the Company’s
Common Stock (the “ Shares ”) at a purchase
price of $.00001389 per Share for a total purchase price of
$100.00 . The term “Shares” refers to the
purchased Shares and all securities received in replacement of or
in connection with the Shares pursuant to stock dividends or
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and
all new, substituted or additional securities or other properties
to which Shareholder is entitled by reason of Shareholder’s
ownership of the Shares.
2. Purchase . The
purchase and sale of the Shares under this Agreement occurred at
the principal office of the Company simultaneously with the
execution of the Common Stock Purchase Agreement dated May 31, 2001
(the “ Purchase Date ”) between the Company and
the Shareholder.
3. Limitations on Transfer
. In addition to any other limitation on transfer created by
applicable securities laws, Shareholder shall not assign, encumber
or dispose of any interest in the Shares while the Shares are
subject to the Company’s Repurchase Option (as defined
below). After any Shares have been released from the Repurchase
Option , Shareholder shall not assign, encumber or dispose of
any interest in such Shares except in compliance with the
provisions below and applicable securities laws.
(a) Repurchase Option
.
(i) In the event of the voluntary or
involuntary termination of Shareholder’s employment or
consulting relationship with the Company for any reason (including
death or disability), with or without cause, the Company shall upon
the date of such termination (the “ Termination Date
”) have an irrevocable, exclusive option (the “
Repurchase Option ”) to repurchase all or any portion
of the Shares held by Shareholder as of the Termination
Date which have not yet been released from the
Company’s Repurchase Option at the original purchase price
per Share specified in Section 1 (adjusted for any stock splits,
stock dividends and the like).
(ii) The Repurchase Option shall be
exercised by the Company by written notice at any time following
the Termination Date to Shareholder or Shareholder’s executor
and, at the Company’s option, (A) by delivery to Shareholder
or Shareholder’s executor with such notice of a check in the
amount of the purchase price for the Shares being purchased, or (B)
by cancellation of indebtedness equal to the purchase price for the
Shares being repurchased, or (C) by a combination of (A) and (B) so
that the combined payment and cancellation of indebtedness equals
such purchase price. Upon delivery of such notice and payment of
the purchase price in any of the ways described above, the Company
shall become the legal and beneficial owner of the Shares being
repurchased and all rights and interest therein or related thereto,
and the Company shall have the right to transfer to its own name
the number of Shares being repurchased by the Company, without
further action by Shareholder.
(iii) One hundred percent (100%) of
the Shares shall initially be subject to the Repurchase Option.
1/4th of the Shares shall be released from the Repurchase Option on
the date that is one year after the Vesting Commencement Date (as
set forth on the signature page of this Agreement), and 1/48th of
the total number of Shares shall be released from the Repurchase
Option at the end of each month thereafter, until all Shares are
released from the Repurchase Option; provided, however, that such
releases from the Repurchase Option shall immediately cease as of
the Termination Date. Fractional shares shall be rounded to the
nearest whole share.
(b) Assignment . The
right of the Company to purchase any part of the Shares may be
assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.
(c) Restrictions Binding on
Transferees. All transferees of Shares or any interest
therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable,
the Repurchase Option. In the event of any purchase by the Company
hereunder where the Shares or interest are held by a transferee,
the transferee shall be obligated, if requested by the Company, to
transfer the Shares or interest to the Shareholder for
consideration equal to the amount to be paid by the Company
hereunder. In the event the Repurchase Option is deemed exercised
by the Company pursuant to Section 3(a)(ii) hereof, the Company may
deem any transferee to have transferred the Shares or interest to
Shareholder prior to their purchase by the Company, and payment of
the purchase price by the Company to such transferee shall be
deemed to satisfy Shareholder’s obligation to pay such
transferee for such Shares or interest and also to satisfy the
Company’s obligation to pay Shareholder for such Shares or
interest. Any sale or transfer of the Shares shall be void unless
the provisions of this Agreement are satisfied.
4. Escrow of Unvested
Shares . For purposes of facilitating the enforcement of
the provisions of Section 3 above, Shareholder agrees, immediately
upon receipt of the certificate(s) for the Shares subject to the
Repurchase Option, to deliver such certificate(s), together with
an
-2-
Assignment Separate from Certificate in the form
attached to this Agreement as Exhibit A executed by
Shareholder and by Shareholder’s spouse (if required for
transfer), in blank, to the Secretary of the Compa
